The latest push for lifting the federal prohibition of cannabis and paving the way for cannabis business banking services has failed, but the senator behind the measure isn’t backing down.

U.S. Sen. Cory Gardner, R-Colorado, has spent nearly a year pushing for the passage of the STATES Act that would give federal permission to the states to write their own rules on cannabis. His most recent attempt was to attach the STATES Act as an amendment to the First Step Act, the recently passed landmark criminal justice legislation.

In a statement, Gardner said, “While we are debating criminal justice reform, we need to address the threat of prosecution by the federal government for people in Colorado that are operating legal businesses under state law.”

During this lame-duck session, when the newly elected officials have not yet taken office, the current Senate Majority Leader Mitch McConnell controls the floor. With some procedural maneuvering, McConnell was able to block many amendments to the First Step Act, including Gardner’s STATES Act amendment. The First State Act went on to have bipartisan support in the Senate (87-12) and in the House (356-36) and was signed into law on December 21, 2018.

The STATES Act also faced opposition from Sen. Chuck Grassley, R-Iowa, who reportedly called the idea a “back door to legalization.” But with a majority of the American public in favor of legalization, particularly for medical cannabis, Gardner said he isn’t through fighting for states’ rights.

Banks and financial institutions watch this discussion with baited breath. Once federal cannabis prohibition is eliminated, the rules and guidelines will become much clearer for banks and the risks will be much lower. The current murky rules have left many banks too worried about the risks to accept cannabis businesses as customers. That means more financial services could start to become available to the growing cannabis industry, including checking accounts, savings accounts, merchant accounts, loans, and more.

Banks aren’t the only ones who struggle with the current regulations. As-is, the federal government and its regulating agencies have conflicting policies about cannabis, and they even have trouble accepting all-cash tax payments from state-legal cannabis businesses.

Gardner has pledged to push the STATES Act forward again this year, and with the Democratic majority now in the House, there may be more movement. The STATES Act isn’t the only cannabis legislation that has been discussed at the federal level, and it doesn’t go as far as some others would. The STATES Act was first introduced in June 2018 with Sen. Elizabeth Warren, D-Massachusetts.

While he was pushing for the bill, Gardner said, “This amendment at this time recognizes that you shouldn’t go to federal prison for following state law,” Gardner said. “That in its essence is sentencing reform. If we had a chance to vote on this amendment today the amendment would be germane … this amendment has the support from this body on both sides of the aisle to fix this conflict and allow the states to make their own decisions without the heavy hand of Washington telling them what to do.”

About the Author: Brian Ellis

With 6 years' experience in business journalism, Brian is the person we turn to for anything related to the business of cannabis. His news coverage spans topics including marijuana business and finance. Brian's work features on themarijuanapages.com, marijuanareferral.com, , marijuanamerchantaccount.com and marijuanainsuranceagent.com.